Americans Are Baffled By Long-Term Care Financing, But Want Medicare To Pay For It. – Forbes

Americans age 40 and older continued to be flummoxed by the challenges of long-term care financing, but increasingly believe that Medicare ought to provide such supports and services. According to a new poll by the Associated Press-University of Chicago NORC Center for Public Affairs Research (AP-NORC), support for a Medicare long-term care benefit has grown significantly over the past five years. And for the first time since the survey began, a majority of Republicans favor Medicare long-term care.

The survey, funded by the SCAN Foundation, confirmed prior research that found that Americans are woefully unprepared for long-term care and deeply misunderstand how much such care costs or how it currently is financed. Fifty-seven percent say they expect to rely on Medicare for supports and services (even though the program currently does not provide long-term care benefits). Only one-quarter think they’ll get help from Medicaid (which does, but only if you are very frail and impoverished). Half are counting on Social Security (even though average benefits would pay for less than fifteen percent of the cost of a typical nursing home and perhaps one-third of the cost of assisted living.

How Will I Pay Today?

Only about one of every six respondents say they’ll rely on private long-term care insurance and one if five say they’re counting on other sources of future income, even though two-thirds acknowledge they have done little or no planning for their care needs.  Half are not confident that they’ll have the resources when the time comes. Worse, they consistently underestimated the cost of care in a nursing home or assisted living facility. They were closer when it came to the cost of paying for homecare aides.

While a majority of Americans incorrectly think that the current Medicare program pays for long-term care, a growing majority also thinks the program should provide such a benefit.  Since the survey began in 2013, overall support for a Medicare benefit has increased by nearly 20 percentage points, from 39 percent to 56 percent.  Support among Democrats increased by about one-third to 63 percent. And support among Republicans rose by more than 60 percent, from 32 percent to 53 percent.

Support For A Public Benefit

About two-thirds favor a public catastrophic insurance program, an idea proposed last year by the Long-Term Care Financing Collaborative (a group I participated in). Such a benefit could be provided within Medicare or as a separate program. If it were funded with a payroll tax surcharge, a $100-a-day lifetime benefit (after a five year waiting period) would cost a median-income worker about $300-a-year.

However, any Medicare benefit is far from the most popular solution among the respondents. About three-quarters favor new tax breaks to encourage either savings or the purchase of long-term care insurance, and two-thirds would like to be able to use retirement funds to pay premiums. Only about one-third favor a government mandate that requires them to buy private insurance.

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